daff annual report 2011/12: performance information acting director-general mr sipho ntombela 9...

DAFF ANNUAL REPORT 2011/12: PERFORMANCE INFORMATION

Acting Director-General Mr Sipho Ntombela

9 October 2012

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PRESENTATION OUTLINE

OverviewSector Review Contribution to the economyPerformance by ProgrammesChallengesWay ForwardFinancial StatementsActual Spending per ProgrammeActual Spending per Economic ClassificationConclusion

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OVERVIEW

The Department presents its Annual Report for the 2011/12 financial year This presentation focuses attention on the departmental achievements made during

2011/12 and highlights planned deliverables and challenges encountered;

During 2011/12 the Department focused on the implementation of the new approved macro structure to ensure maximum performance of the deliverables in terms of the MTSF priorities; and

Of the 12 key Outcomes identified for implementation until 2014, DAFF directly contributes to Outcomes 4,7 and 10.

The operating environment was also influenced by the following policies: National Growth Plan, Industrial Policy Action Plan 2 and the Comprehensive Rural

Development Plan; and

The Integrated Growth and Development Plan for the AFF sector will ensure that the sector responds to the abovementioned Plans in addressing national challenges.

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OVERVIEW….

The Department identified the following areas as core for focussed service

delivery during the financial year:

Employment creation and increasing the number of participants in agriculture,

forestry and fisheries (AFF) through support for smallholders and processors;

Improving the income and conditions of farm workers, foresters and fishers;

Enhancing exports; and

Ensuring the sustainable use of natural resources.

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SECTOR REVIEW

The AFF sector is growing slower than the rest of the economy with persistent low levels of employment relative to the rural population;

However, it remains a critical sector for employment and food security among the country’s rural poor in particular; and

Growth in real terms of 1,3% a year from 1994 to 2011, compared to 3,3% for the rest of the economy – so fell from 4,6% of GDP in 1994 to 2,4% in 2011.

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SECTOR REVIEW.…

PRODUCTION

i. Agriculture – Decrease in staple food production and increase in other high value crops (horticulture);

ii. Forestry – South Africa faces a looming timber shortage over the medium and long term due to production shortfalls; and

iii. Aquaculture – Major investment required in terms of experimental facilities, hatcheries, research and disease management to promote aquaculture. Natural resources (marine living resources) over-exploited & stocks depleted; limited potential to expand.

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SECTOR REVIEW .…

PROFITABILITY

Production of certain staple foods less profitable – concern in terms of food security;

Economies of scale and impact on productivity and profitability must be analysed and considered to enable sector to grow; and

Gross income increased, but due to increases in input costs, net income has not increased at the same rate.

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CONTRIBUTION TO THE ECONOMY

The value of exports showed an increase of 10,5%, from R46 130 million in 2010 to about R50 994 million in 2011;

Top five export products in terms of value for 2011 were, citrus fruit (R7 067 million); maize (R6 038 million); wine (R5 492 million); grapes (R3 398 million); and apples, pears and quinces (R3 337 million);

The value of imports during 2011 came to approximately R44 920 million, compared to

R34 618 million in 2010—an increase of 29,8%;

The five major import products in terms of value during 2011 were, wheat and meslin (R4 346 million); rice (R3 687 million); palm oil (R2 992 million); poultry meat (R2 734 million) and soya-bean oil (R2 712 million);

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CONTRIBUTION TO THE ECONOMY….

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The forestry sector (forestry and forest products) contributes approximately 1,2% to the

Gross Domestic Product (GDP;

The total investment in the forestry (trees) industry increased to R24,8 billion. This investment comprised 58,6% in trees; 19,4% in land; 13% in roads; 6,2% in fixed assets; and 2,8% in moveable assets;

Total book value of investment in the forest products subsector by type of processing plant amounted to R15,7 billion. This investment comprised 82,8% in pulp and board plants; 11,8% in sawmills and veneer plants; 1,0% in pole plants; 0,2% in mining timber and 4,2% in other plants;


The forestry sector employed approximately 201 025 people in 2009. The forestry subsector provided approximately 77 000 direct jobs and 30 000 indirect jobs. The pulp and paper subsector provided approximately 13 000 direct and 11 000 indirect employment opportunities;

Some 20 000 workers were employed in sawmilling and 20 000 indirect jobs were created, while 6 000 direct and 3 000 indirect jobs were created in the timber board industry and 2 200 direct and 2 000 indirect jobs in the mining timber subsectors. A further 11 000 workers were employed in miscellaneous jobs in the forestry sector;

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The fishing industry is a significant employer of mainly unskilled and semi-skilled labourers (mainly in the Western Cape). Direct employment in the industry constitutes approximately 27 000 jobs (16 000 in the primary sector and 11 000 in the secondary and tertiary sectors), while an additional 81 000 people are indirectly employed in industries that are at least partially dependent on the fishing sector;

Unlike most other sectors, growth is not dependent on labour and capital inputs alone. The binding constraint is the stock of fish available, as well as the annual harvest that it can sustain; and

South Africa is a net exporter of fish and fish products. In some cases, like rock lobster, squid, tuna and demersal longline, almost the entire production is exported, and the country is exporting approximately 54% of the total demersal trawl catches (economically the largest fishery). The main markets are Spain, Japan, Italy and the United States of America. The total value of the exports during 2010 was approximately R3,2 billion.

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PERFORMANCE BY PROGRAMMES….

PROGRAMME 1: ADMINISTRATION

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Indicator Baseline Target Actual Variance

Performance management and development system [PMDS]

80% adherence to PMDS

50% of employees used the system

Percentage reduction in vacancy rate

11% 12% 13.4% The increase in the vacancyrate resulted from delays inthe verification ofQualifications, citizenship andcriminal checks

Master Systems Plan Developed (MSP)

None Intergrate and review MSP

40% still outstanding

Unavailability of resources from SITA


PROGRAMME 1: ADMINISTRATION ….

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Indicator Baseline Target Actual VarianceKnowledge and Information Management Strategy approved and implemented

None Review andimplementphase 1 of KIMStrategy

The first draft of the KIMStrategy has beencompleted

The strategy still has to be subjected to Departmental processes

Number ofsmallholder andsubsistence farmersaccessing financialservices

10 000smallholderfarmersaccessingfinancial services

A total of 72 856smallholder farmersreceived support throughthe CASP and Ilima/Letsema conditionalgrants during 2011/12



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Number ofsmallholder andsubsistence farmersaccessing financialservices (cont.)

10 000subsistencefarmersaccessingfinancial services

A total of 47 818subsistence farmersreceived support throughthe CASP and Ilima/Letsema conditional

Effective planningsystemfor the sector

The Strategic Plan for the Department ofAgriculture, Forestry and Fisheries 2011/12–2014/15 was tabled inParliament.

Align nationaland provincialplans withPresidentialoutcomes andtargets.

A draftIntegrated Strategic Planto this effect has been discussed at outcomesforums

The process has to fit in withthe process of outcomesreview that is facilitated by thePresidency and is still in progress



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MLRA reviewed and implemented

Review of theMLRA and alignmentof departmentalpolicies

The status is that the MLRADraft Bill has beensubmitted to line functionsfor comment


PROGRAMME 2: ECONOMIC DEVELOPMENT, TRADE AND MARKETING

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Increased intra-Africatrade

None Tripartite (SADC, EAC,COMESA) free tradearea offer foragriculture

The tripartite free trade areanegotiation was launched byHeads of state at a Summit from 8–12 June 2011

During the meeting there wasno consensus on all theprinciples underlying thenegotiations

Sector chartersimplemented

None Implementation of the AgriBEE (10 deals facilitated)

Eight project proposals werereceived and verification of the projects done

Delays in finalising agreement with Landbank due to reforms in the disbursement of the AgriBEE fund


PROGRAMME 2: ECONOMIC DEVELOPMENT, TRADE AND MARKETING ….

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Agro-processing jobcreation initiativesand strategiesimplemented

None DAFF, the dti and EDDagro-processingplans and strategiesaligned

The Agro-processing Strategywas completed andapproved by DEXCO. It isaligned with the dti and EDDprogrammes


PROGRAMME 3: FOOD SECURITY AND AGRARIAN REFORM

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Approved FoodSecurity Policy

A draft Food Security Policy wascompleted

Develop andapprove the FoodSecurity Policy

The policy was recommended to Cabinet for approval

Number ofproducersreceivingcomprehensiveproductionsupport

15 000 A total of 21 192 newsmallholder producershave been identified and supported

Approved PolicyonMechanisationSupport Model

None Develop andapprove Policy onMechanisationSupport Model

The model was developedand a workshop conducted with provinces


PROGRAMME 3: FOOD SECURITY AND AGRARIAN REFORM ….

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Overallcoordination onthe resolutions ofthe workers’summit

National DeliveryForum for Vulnerable Workers onFarms and in Forestry andFisheries was established.

Establishment ofvulnerableworkers’ deliveryforums/units in allprovinces

Vulnerable workers’delivery units have beenestablished in 4 provinces(Eastern Cape, WesternCape, Limpopo and FreeState)

Vulnerable workers’delivery units could notbe established in 5 provincesbecause ofbudgetary constraints.The process is deferred tothe 2012/13 financialyear


PROGRAMME 4: AGRICULTURAL PRODUCTION, HEALTH AND FOOD SAFETY

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Indicator Baseline Target Actual VarianceNumber of animalschemesimplemented andmonitored

Productive animals(Kaonofatso ya Dikgomo):A total of 1 415 emerging(beef) farmers, with a totalherd size of 15 113animals, were servedduring the period underreview, under Kaonofatsoya Dikgomo

9 The Dairy Milk Recording andImprovement Scheme and Kaonafatso ya dikgomo

Unfortunately, the target wasnot realistic—this was realisedduring implementation andreporting


PROGRAMME 4: AGRICULTURAL PRODUCTION, HEALTH AND FOOD SAFETY ....

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Indicator Baseline Target Actual VarianceSurveillance reportspublished

None 2 Designed a prevalencesurveillance study for theproposed FMD protectionzone in KwaZulu-Natal todetermine the number ofFMD serological reactorsin the area

The surveillance actionsembarked on, and thesubsequent reports that are

produced, are outside of thecontrol of the Directorate:Animal Health, and are theresult of serious diseaseoutbreaks that occur


PROGRAMME 4: AGRICULTURAL PRODUCTION, HEALTH AND FOOD SAFETY ….

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Disease reportssubmitted

None 4 Four quarterly diseasereports for use within theDAFF were produced


PROGRAMME 5: FORESTRY AND NATURAL RESOURCE MANAGEMENT

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Number of hectaresplanted (Forest SectorTransformationCharter)

None 10 000ha A total of 499,37 haof land wereafforested

The DAFF does not have land or the fundsto do afforestation

Number of smallgrowers supported

None 2500 A total of 2 898 small growerswere supported,

Approved PolicyonMechanisationSupport Model

None Develop andapprove Policy onMechanisationSupport Model

The model was developedand a workshop was held with provinces


PROGRAMME 5: FORESTRY AND NATURAL RESOURCE MANAGEMENT….

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Disaster risk mitigationstrategiesimplemented

A vulnerability assessmentwas conducted andthree vulnerable areaswere identified in thesouth-western parts of theFree State

A disaster riskmanagementsystem wasdeveloped

The document on copingstrategies for floods has beenapproved by the National AgrometeorologyCommittee (NAC)


PROGRAMME 5: FORESTRY AND NATURAL RESOURCE MANAGEMENT….

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Climate changeadaptation plansImplemented

Climate changeadaptation plansdeveloped

The draft Climate Change SectorPlan has been developed

Number of governmentirrigationschemes revitalisedfor smallholderfarmers

The Policy Framework onIrrigation in South Africawas presented in theEC, FS,LP and MP

0.5% The Makhathini,an area of 150 ha and 115 at Taung (0.02%)


PROGRAMME 6: FISHERIES MANAGEMENT

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Number of smallholderproducerassociationsestablished

1 The Marine Finfish Farmers’Ass. and the Camdeboo Women’s Trust established

Number ofcommunity projectsimplemented throughthe WFFP

10 10 projects were implementedas planned

Resource assessmentsand catch limitrecommendations for22 fisheries sectors

None Research on fishstocks for 22fisheries sectors

Relevant and necessaryscientific research hasbeen conducted



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Commercial fishingrights allocated

None Revise rightsallocationpolicies inaffected sectors

Delays were experienced withobtaining signatures and infollowing supply chainmanagement procedures



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Indicator Baseline Target Actual VarianceExtent of the recoveryof abalone, hake,West Coast rocklobster (WCRL) andline fish

Abalone: Three abalonetask group meetings wereheld. Abalone divingsurveys were completed inZone B (20 transects)

Develop recoveryplan for abalone,hake, WCRL, andline fish

Abalone,Hake,WCRL, Line fish: Recovery plans approved

Commercial fishingrights holders’performancereviewed

Implement,manage andcontrol findings ofcurrentperformancereview process

Review of rights holderscompleted.Public notice on theconclusion of the processissued

Findings of the review processwill be implemented duringthe new financial year

CHALLENGE

SUPPORT

i. Forestry and fisheries currently do not have extension and support services.

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WAY FORWARD

Recognising that: Smallholder producers number approximately 200 000 (belonging to about

140 000 households), and are predominantly black; Subsistence producers consist of the approximately 2,7 million households

who practise agriculture mainly for purposes of own-consumption, largely by means of gardening; and that

Together smallholders and subsistence producers comprise about 14 million hectares of agricultural land.

The Masibambisane Rural Development Initiative, attempts to tap into this potential to address the structural challenges faced by South Africa’s emerging sector dominated by small producers

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WAY FORWARD….

The Masibambisane Initiative therefore aims to improve market access for smallholder and subsistence producers, through the government preferential procurement policy i.e. government markets e.g.: National School Nutrition Programme; Hospitals; and Prisons.

Supporting producers to supply such markets requires an up-scaling and upgrading of producer support programmes: Review of extension policy and extension recovery programme; Development finance policy for smallholder producers; and Decentralised capacity building institutes - agricultural colleges will be

upgraded to accommodate training of producers, along with research and

technical support.

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WAY FORWARD….

Market development for smallholders: Agro-processing (market) infrastructure (pack-houses, storage, processing,

logistics, etc.) development and management support; Agro-logistics; and Develop an appropriate supply chain support model for new entrants (for

example PPP + incentives for enterprise development).

Business Development: Establishment of cooperatives; Facilitate smallholder integration through commodity groups; Facilitate the implementation of the AgriBEE Fund; and Provide training to cooperatives and commodity groups.

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WAY FORWARD….

The ‘new’ Food Security Policy raises the importance for an equitable Agricultural Food Economy as a fundamental part of social and economic transformation.

The ‘new’ Food Security Policy will emphasise an intergovernmental,

multidisciplinary approach to food insecurity: Addressing the needs of the most vulnerable; Nutrition deficiencies, especially among children; The implications of concentration of the food network, on food prices, job

losses, whilst ensuring the sustainable growth of the sector to the benefit of all; Sustainable agricultural production systems (climate smart agriculture); Improved governance systems.

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WAY FORWARD….

A national spatial planning system (kept updated and live) that guides and lays

out required interventions by space. i.e. layers of intervention must translate

into a summed effect on rural development on amongst others the following areas: Services;

Education;

Agriculture; and

Infrastructure development.

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WAY FORWARD….

Summary of Policy and Programme Responses

Agro-processing Strategy Aquaculture Development Strategy Small-scale Fisheries Policy Veterinary and Para-Veterinary Amendment Bill Commodity strategies:

Working with industry partners to better understand the bottlenecks affecting various commodities and the remedies to these; and

At core of Minister’s Service Delivery Forum.

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WAY FORWARD….

Summary of Policy and Programme Responses cont…

Food Security Policy:Using preferential procurement to ensure that smallholders capture market

to supply School Nutrition Programme, etc; and Shifting emphasis of the Comprehensive Agricultural Support Programme

expenditure from on-farm infrastructure to marketing infrastructure. Development of a Bio-fuel feedstock Sector Strategy Development of the Food Safety Policy Development of the Organic Policy IGDP finalization and approval Implementation of the Agricultural Marketing Policy

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FINANCIAL STATEMENTS

Vote 26

-Unqualified audit report-Predetermined objectives

Usefulness of information

Reliability of information

-Other matters

Procurement (three written price quotations)

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ACTUAL SPENDING

R’000

Main estimate

Agriculture, Forestry and Fisheries 4 719 741

Plus: Adjustments estimate 244 708

Total amount appropriated 4 964 449

Less: Actual expenditure 4 928 273

Variance 36 176

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ACTUAL SPENDING ….

R’000

Underspending 36 176

Less: Procurement of IT related equipment 3 349

Mobile veterinary clinics not concluded 18 781

Transfers not made – MoU not finalised 6 667

Transfers to international organisations not concluded 3 370

Procurement of capital assets for forestry operations 2 063

Other minor assets for capital assets 781

Not spent by the Department 1 100

% of total appropriation 0,2

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ACTUAL SPENDING PER PROGRAMME….

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Final Actual % VarianceAppropriation Expenditure SpentR’000 R’000

Administration 1 345 746 1 339 756 99.6 5 990

Agriculture Production, Health

and Food Safety 908 650 889 347 97.9 19 303

Food Security and

Agrarian Reform 1 254 360 1 249 371 99.6 4 989

Trade Promotion and

Market Access 193 622 190 185 98.2 3 437

Forestry 910 100 907 662 99.7 2 438

Fisheries Management 351 971 351 952 100.0 19

Total 4 964 449 4 928 273 99.3 36 176

ACTUAL SPENDING PER ECONOMIC CLASSIFICATION

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Final Actual % Variance

Appropriation Expenditure Spent

R’000 R’000

Current Payments

Compensation of employees 1 321 020 1 320 738 100.0 282

Goods and services 675 022 674 205 99.9 817

Interest and rent on land 599 547 91.3 52

Transfers and subsidies 2 810 496 2 800 459 99.6 10 037

Payments for capital assets 156 949 131 975 84.1 24 974

Payments for financial assets 363 349 96.1 14

Total 4 964 449 4 928 273 99.3 36 176

CONCLUSION…. Strengthen interdepartmental cooperation and collaboration for the

development of the production infrastructure and other support policies and programmes;

Enhance cooperation with the provinces and local government to enhance governance in the sector;

Accelerate collaboration with stakeholders through existing forums and commodity group deployments;

Collaboration for the development of market expansion strategies for key/priority international markets; and

Collaboration in the utilization of key policy instruments to enhance the sector.

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THANK YOU

KE A LEBOGA

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daff annual report 2011/12: performance information acting director-general mr sipho ntombela 9...

Documents

sector reviewthe aff

terms of value

critical sector

real terms

national growth plan

staple food production

economythe value of

rural populationhowever